The remarkable transformation of the Phnom Penh Water Supply Authority (PPWSA) is an important lesson for all. It shows that success can be achieved, even when starting at rock bottom, and crucially, that money is not a barrier to success. Today, many of the performance indicators of PPWSA are better than that of water utilities in London, Los Angeles or Paris.

From rock-bottom, PPWSA now performs better than utilities in LA & is set to meet SDG6, five years early

And more than that, PPWSA is set to meet Sustainable Development Goal 6, ensure access to water and sanitation for all, by 2025, five years earlier than the global 2030 target. This miracle story had a dedicated session at 2021 Singapore International Water Week (SIWW). The key takeaways from that are below, and you can catch our key takeaways from other interesting SIWW sessions here.

“…one of the things that thoroughly impressed me, is that it is the only city in a developing country where I found everyone in the water utility is drinking water straight from the tap. I have never seen this anywhere in the world. Anywhere I go, the utility people have bottled water on top of their desk, and they drink from there.”

Professor Asit Biswas, Honorary Professor Glasgow University and advisor to Presidents, PMs, Ministers & UN organisations

 

Phnom Penh Water Supply Authority (PPWSA): Then & Now

In 1993, Cambodia was re-building from a civil war. The water situation across the country was dire; there was pretty much no drinking water. PPWSA, located in Phnom Penh, the country’s capital, was in a dysfunctional state and suffering from corruption and bankruptcy, which was reflected in its performance – see highlights below and key stats in table below (middle column).

  • Non-revenue water (NRW) was extremely high at 72%, which means less than one-third of water produced made it to consumers;
  • Only 10% of customers had water meters, and almost no one ever paid a bill;
  • Every day, one illegal connection was created; and
  • Operating with very old technology (70-year-old pipes) and limited staff with only five engineers.
Indicators 1993 2017
Total revenue (million riels) 1,109 232,893
Production capacity (m3/day) 63,000 592,000 (2020)
Non-revenue water 72% 6%
Service hours per day 10 24
Total connections 26,881 333,288
Pipe network (km) 280 2,845

 

Change from 1993 to 2017 is like night & day

Fast forward to 2017, and the difference is night and day, as can be seen from the stats in the table above (right column) and the key performance highlights below.

  • NRW has been reduced to 6% (Singapore comparatively is at around 5%);
  • 100% metering and set up incentive & penalty system for billing, which improved fee collection;
  • Eliminated illegal connections; and
  • Has undergone a rehabilitation of its distribution network and operation facilities.

Clearly, PPWSA is an example for all water utilities in developing countries. So, how did they do it?

2 key factors behind PPWSA’s success

1. Leadership – visionary and long-term

All the speakers during the SIWW session agreed that leadership was a key success factor for PPWSA’s transformation, noting it has had remarkable director generals that were not only visionary but held the position for many years, meaning that true change could be implemented.

Unanimous among speakers that strong leadership was key to build transparency at all levels…

The herculean task of rehabilitating PPWSA was given to Director General Ek Sonn Chan. As soon as Chan was appointed in 1993, he quickly formed a task force that instigated institutional reform that enabled notable transparency at all levels of the organisation seen today. He also cleaned up the shop, getting rid of corrupt staff and hunting down illegal connections.

…and promote unique culture to build internal competencies like its accounting system

Another notable achievement was the setting up of an accounting system from scratch, which later became the benchmark for all Cambodian utilities. The leaders of PPWSA today continue to implement changes like using modern technology to improve customer service, improving employee conditions (in-house set-up training and a canteen) and are empowering youth within the organisation, as shared by Dr Sim Sitha, current Director-General of PPWSA.

The example of setting up the accounting system was picked up by Pawan Sachdeva, Non-Executive Director, Water Management International Pte Ltd, who said this was just one example where PPWSA built internal competencies without any external help. This can do, and dedicated mentality nurtured from the top-down has led to many successes for PPWSA.

This is the beauty of the organisation, if externally the things were not helping them out, they created internal competencies….… [PPWSA] is the only company [among the five traded companies] that has shown it can live up to the expectations of investors and deliver quarterly reporting…”

Pawan Sachdeva, Non Executive Director, Water Management International Pte Ltd

 

2. Seeking out and securing external support

The second key success factor for PPWSA has been finding external support, both financial and from the government.

Yes, of course, PPWSA needed financial support, it was completely bankrupt in 1993 and didn’t even have money to buy the chemicals to treat water, but as mentioned before, PPWSA did not let money be a barrier to its success. After initial attempts failed, PPWSA managed to secure funding (mix of loans and grants) from the Japanese International Cooperation Agency (JICA) and other development agencies.

Early on, PPWSA proved itself a good business partner; has maintained support from JICA for ~30 years

And in the PPWSA style, it has successfully maintained support (financially and other) from JICA ever since and actually, according to Dr Megumi Muto, VP at JICA, the PPWSA experience has changed the way JICA supports water utilities globally. Much of this continued support has been due to the leadership mentioned previously and the master plans that have been created and executed over the decades, proving it a good investment and business partner.

“I was told that Sustainable Development Goals and Millennium Development Goals on water could not be met, and the biggest problem is money…

… PPWSA has clearly indicated if you have a good plan, and you implement the plan, money is not an object.”

Professor Asit Biswas, Honorary Professor Glasgow University and advisor to Presidents, PMs, Ministers & UN organisations

PPWSA was also able to secure support from the Cambodian government, which was providing heavy subsidies. But the transformative support came from two ministries (Ministry of Industry, Science, Technology and Innovation & Ministry of Economy and Finance) that empowered PPWSA and ultimately in 1996, PPWSA became an autonomous organisation, which Dr Sitha said was very important for it to grow successfully.

It’s not over for PPWSA with new challenges ahead – wastewater & climate change

PPWSA has been through a complete transformation and is now a global beacon for water utilities in developing countries. Still, it can’t rest with challenges ahead, specifically treating wastewater and dealing with the impacts of climate change.

“… the importance of wastewater treatment is still not emphasised enough [in developing countries].” 

Pawan Sachdeva

“Wastewater regulation and treatment penetration are two conundrums that Phnom Penh and other developing countries must solve…. the importance of wastewater treatment is still not emphasised enough.”, said Sachdeva. And unlike in Singapore, drinking water and wastewater are managed by different organisations. Still, as PPWSA continues to grow, and so do investor expectations, they will need a handle, if not treat wastewater. To do this, PPWSA will need to adjust its tariff as only 10% of the current tariff is allocated for wastewater, but this won’t be enough. So, JICA is working with PPWSA to develop a more supplicated tariff system to enable future wastewater treatment.

As for climate change, Dr Sitha said that PPWSA is already employing several climate strategies such as using green energy; however, this is an area that will need more attention.

As for climate resilience, already employing several strategies such as green energy, but will need to do more and look how to integrate into PPWSA’s 3rd Master Plan

As PPWSA implements its 3rd Master Plan (2016-2030), it will look to include new climate measures. “Taking mitigation and adaptation measures of climate change in the roadmap could be a new challenge“, said Dr Muto, but as PPWSA has shown, it is not afraid of challenges. We should stay tuned to see how it solves these next challenges.


Further Reading

  • How To Solve The Global Water Crisis – Most of the world’s water woes can be solved with enough money and willpower. The real challenges are thus not technical but political and ethical. Check out why World Bank’s Scott Moore thinks so
  • Regulators Have A Role To Play In Tackling The Global Water Crisis – Climate change creates systemic risks to financial systems. With USD316bn of losses from disasters in 2018-19, Ceres’ Robin Miller on urgent actions regulators can take to ensure stability and investors that have made a start on water risks
  • More than Pipe Dreams: Non-Revenue Water Solutions – Pure Technologies’ Jon Boon shares their experience in tackling non-revenue water in Manila and why this could be the fastest way to water efficiency
  • Rural Drinking Water Solutions – 783 million people in rural areas still lack safe drinking water due to diseases coursing through waterways. Ling Li on why a traditional water distribution system is not necessarily the best answer & shares cheaper alternatives
  • Sharing Rivers: The Lancang-Mekong Case – Using the emergency water release by China to help downstream countries in the Lancang-Mekong River Basin as an example, Tsinghua University’s Prof. Zhao Jianshi explores the benefits of cooperation & the importance of China
  • Youth & Water – 3 Key Takeaways from Egypt & Stockholm – CWR intern Alex Whitebrook shares key takeaways from his recent trips for the World Youth Parliament for Water. See what’s on their minds

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